tv Nightly Business Report PBS June 26, 2015 6:30pm-7:01pm PDT
. >> announc this is "nightly with tyler mathisen and sue herera. >> weekend cliff hanger the big issue hanging over the market could come to a head this weekend as greece and its creditors resume talks tomorrow. >> historic ruling. the supreme court gives same-sex couples the right to marry. >> left in the does being. a big year for small caps but can the run continue in the second half? all that and more tonight for "nightly" this friday june 26. good evening, everybody. i'm bill griffeth in for tyler mathisen. and i'm sue herera. a major ruling from the supreme court. but we begin with greece where the clock is ticking.
the country rejected a five-month extension of the bailout and with no deal yet, greece is one day closer to missing a key payment deadline. talk with creditors will continue this weekend but significt differences remain with next week's june 30th deadline fast approaching. the greek finance minister is holding out hope that an release much-needed funds can be reached as alexis tsipras calls for an urgent meeting with his cabinet. here is more from the heart of athens. >> friday night in central greec where we are in the heart of the capital city of greece. not gathering for a friday night out. they are gathering for yet another demonstration, this time sponsored by the communist party to protect against the creditors in this continuing battle to avoid a default. we thought we'd have a proposal
that would work. a 15.5 billion euro extension from creditors including the imf and european commission but that was immediately turned down by the greek prime minister alexis tsipras and his finance minister. said it was unacceptable and blackmail, is the way the greek prime mr put it. >> then principles for democracy, sole dairy and mutual respect not based on blackmail and ultimatum. the extension of financing for greece included more pension reform and changes to the tax code that the greeks have put forward earlier in the week. as we head to more negotiations in brussels over the weekend, that the greek default is still on the cards. this is "nightly busine" in athens. >> well, investors did remain
cautious ahead of the meeting in brussels t could decide greece's fate. nike rose more than 4% on better than expected earnings which we told you about last night. that increase accounted for more than half of the dow gains today. the nasdaq went the other direction as results from micron weighed on that. down sharply today by the close the blue chip average. the nasdaq down 31 points the s&p 500 was just a fraction lower. for the week the major averages down fractionally. so with greece looming and a shortened holiday week ahead of us what should investors work for come monday? bob pisani has more from the stock exchange. no deal in greece and a 7% drop in the mainland china stock market. ma feel that a deal will be made at the last minute in greece or if they do default, it will not affect other markets.
now, next week marks the end of the first half of the year and many are arguing that the u.s. economy is showing signs of improvemen that means the u.s. stock market would be the place to be in the second half of the year even if there is a rate hike. speaking of an improving economy, we'll see if that trend continues next week when there will be a lot of data in a short amount of time due to the july 4th holiday. housing has been strong recently for example, including home prices will get pending home sales, contracts signed on monday and a look at home price trends on tuesday. we'll get our first look at data on wednesday with manufacturing pmi and the most important report the june's jobs report will be out on thursday. for "nightly busine" i'm bob pisani. >> steve is joining us to talk the week ahead, investment strategist at h.i.t. wealth management to see you. >> nice to see you, thank you.
>> what else are you expecting? some are expecting a lot more volatili because one, it's a holiday shortened week and, two, it's data heavy. >> yeah. there's a ton of data. as you were talking about with greece i think a lot of people have been holding their money off of the sidelines for this weekend to see what the final kind of final results happen and after that you can see a lot of volume next week. again, it's the middle of the summer. not going to get anything crazy. you should see more than your averagamount. the big number as we mentioned, the jobs number out on thursday morning. would a strong jobs report be good or bad news for the stock market. in other words, we've had very strong consumer data coming out lately. wo this be the number that pushes the fed towards raising rates sooner rather than later? >> yeah. i mean a lot of people feel that way. if unemployment keeps going down like it's expected to do and the jobs report looks good again, which a lot of people are expecting, it's going to seal the deal that we'll see an
interest rate hike and now the real question starts to become again, given that europe doesn't completelyl apart, is it one hike or two hikes before the end of the year and what does that really mean to the bottom line interest rate? >> yeah. and the other issue is there really aren't too many places left to put your money. >> right. >> and so stocks really -- it's been a real conundrum for a lot of investors. so how do you weather that volatility and still remain fully vested in stocks if you're a long-term investor? >> that's the hard part right now, right? because buying into bonds right now is very difficult to do knowing that -- what are you going to do? buy a five-year bond and make 1% over the year for that and likely know from two years from now you're going to hold something tt is worth 20% less? the stock market is probably fairly valued right now. maybe a little on the high side. there is a risk of a pull back so which evil do you pick? i think mof our clients are working towards the stock market
side. the consumer confidence is going to go up a little bit more. it's hard to make an argument no to be in the u.s. market but not as easy to do a year or two ago. steve, thanks. have a great weekend. appreciate it. you, too. speaking of consumers, they were much more optimistic about the economy this month. the university of michigan's consumer sentiment index rose 6% from a month ago to a five-month high. the metric asked consumers to measure things like the national economy and their own personal finances. > a landmark ruling in washingt today as the supreme court voted to legalize gay marriage across the country. hampton pearson has the reaction out of the nation's capital and how that decision could impact business. >> r at the supreme court, crowds cheered on a history making day for the gay rights movement. the supreme court says same-sex marriage is now legal in all 50
. >> whoo! >> reporte the court ruled 5-4. the constitutio guarantees for equal protection and due process means states cannot ban same-sex marriages. justice anthony kennedy, a conservati joined with the court's fou liberals in crafting the landmark decision. kennedy sa"not allowing same-sex couples to marriage creates a stigma for their children." without the predictability that marr offers their children suffer from a stigma knowing their family is somehow lesser. the dissenters defended traditiol marri betwe a man and woman saying that a state maintaining marriage that has persis in every culture througho history can hardly be called irrational. president hailed the ruling as a milestone in american justice. >> there's so much more work to
be done to extend the full promise of every american but today we can say, in no uncertain terms, that we've made our union a little more perfect. >> reporte 13 states have gay marriage bans in place and leading republica presidential candidat saw the high court's decision as far from perfect. je bush said, "i believe the supreme court should have allowed the state to make this decision wisconsin gov scott walker expressed similar concerns. "i believe the supreme court decision is a grave mistake." >> i pronounce you married! >> reporte in new york city mayor bill de blasio officiated two same-sex marriages on the steps of city hall. experts say those and other same-sex couples stand to benefit right away. they are now eligible for the same tax breaks on their benefits as traditional couples. this has a pretty significant impact on companies that offer
benefits to same-sex spouses. in particular it now eliminates all the differences between same-sex spouse coverage and opposite sex spouse coverage which primari was in the area of taxation of benefits. >> on monday the supreme court will bring down e curtain to regulate greenhouse taxes and a critical decision on capital punishment. hampton pearson "nightly at the supreme court. why tempers are rising along with the temperatur
♪ >> excessive rain is taking a toll on the agricultural markets. corn and soybean prices increase for months. >> meanwhile, farmers in californ want some of the rain to head west. hugely important agricultural sector in that state is suffering from the opposite problem, a lack of water. and access to that precious commodity and new roul rules from the state are causing a lot of concern. jane wells has more from california it's going to be a long dry summer in california. tempers are rising with temperatur th state has ordered some of the most senior rights to water
to cut usage but the response has been silent. nearly 70% of those water users have ignored a deadl to prove they are complying. there's confusion and we need to basically find out, you know what this finally means because everybod is confused. and confusion breeds lawsuits including one expected by the byron bethany irrigation district or bbid which turned off the water to farms this week under state orders unless farmers would pay $650 an acre more than 30 ti norm this fifth generation farmer can't afford that. >> we were told about this two weeks ago or three weeks ago so what we did was irrigated everythi we could as fast as we can to keep everything living a little bit longer. >> he's ready to sue, too. turns out, no one is really sure they have to cut back since the state said in another lawsuit the curtailment order it sent out june 12th was only
informatio not enforceable. it had a threatened tone to it. now we're finding out there are advisory notices. it's almost like looking at a stop sign and tellinu what the speed limit is. >> repor the situation looked critical here in this town. it nearly went under during the recession. high tempe on friday to top 100 degrees. not watering the grass and we don't wash t. the car is filthy. >> residents were told they might lose all water this week until the state relented due to health and safety. now mountain house is guaranteed water, only through the end of the year. >> we went to safe way and we bought approxi 25 cases of water. just in case. >> reporte meantime the state is warning it is getting spot checks of people getting curtailmt ords to see if anyone is cheating and this
alfalfa field is not getting any more water this year unless some miraculous falls from the sky. jane wells, byron california. > shares of sears therapeutic, the drugmaker which specializes in using bacteria to treat infectio price shares at $18 a piece and the stock closed with a gain of 174%. finish line also higher on strong results. the sports apparel retailer posting revenue that topped consensus. this is as promotional activity eased. shares popped 4.5% to 28.22. honda restated its financial results for the business year after booking expanded airbag retail costs. the new numbers are down 19% from the year before. this as its top airbag supplier takata is at the center of the
huge recall of millions of recalls bec airbags can violently explode. the stock was up a fraction. we're talking about honda now. microsoft chief executive has outlined some straightforward goals in an internal memo to employees out today obtained by geek wire. employees should empower every person and every organization on the planet to achieve more. specifical to impact producti and improve the company's cloud platform. shares of microsoft down slightly to $45.26. >> t small caps are seeing big returns with only a few trading days left in the first half of the year small caps are outperform their big cap rivals by quite a bit. what is driving them and will the trend continue into the second half? dominic ch takes a look. >> r so far this year the small cap russell 2000 index hovers near record highs and it's up 6%. compare that to the large cap
s&p 500 which also sits near record highs. but it's only up 2% year-to-da the dow just up half a percent. so experts believe it's a game of pla catchup for the small cap stocks. >> after having underperformed last year small caps came in trading relative for the large cap companies. they made up lost ground from last year and also important drivers of stronger domestic growth less vulnerability to a stronger dollar. >> r the belief by many investor is that small cap companies more closely tied to the domestic u.s. economy and less prone to the shock felt by larger companies who operate in a lot of global markets. but more dependence on the u.s. economy is a double-edge sword and a turn for the worst domestic could c the rally. if we were to see an environmen where there was something introduced because of a change in fed policy which we're not expecting, those are
the things that could perhaps undermine either the earnings momentum withi sma cap companies or the environment for those people investing in small caps. b there is a case to be made for people taking a balanced approach in keeping some large caps in your portfolio. thoverhang from the global markets clear up investors may want some exposure to possible global growth which some large cap stocks may provide. >> we have favored the larger cap stocks not only because as we put some of the energy concerns behin us that you'll get better performance from those -- from that level but also some of the general trends we think are shifting more to the international. >> reporte t stock market has been relatively calm through the first half of the year and, if volatility picks up in the second half having a diversifd portfolio may help insulate investors from bigger shocks. for "nightly busine" i'm dominic chu. >> now, even though large caps have underperformed the small
caps last time he was with us on this program back in february he recommended these stocks. abbott labs which in the last three months is up 10%. accenture has gained 13% and he by the way, is jason pride, director of investment stra glenn mead with $29 billion under management. you still like these stocks. that's the definition of long-term invesr anyway isn't it? >> well you know this is an interestin environment. we've got the u.s. equity markets which are a lit overvalued. e of your guests has already commented on that earlier. and international markets, that's really where you take risk but in order to offset and really manage an overall portfolio, you pick up small caps because the valuation is better there and international e valuation is a lot better there, you need to derisk what you're doing in the large
cap base. you can do that with quality dividend growth sort of focus and when you do that you pick up things that are primarily, you know the better valued opportuns are in the health ca space, even with the run that we've seen in abbott labs and you find little opportuns across the board with things lik accenture, global i.t. outsourcing firms which has great growth prospects but a nice stable venture. >> you're almost using these as a hedge against the riskier side of your portfolio. but with a gain of -- >> that's basically what we are doing. in abbott labs up 10%, you're not tempted to take a little bit of a profit there? >> well you know, we have been taking a little bit of a profit. we've added to our small cap exposu recently and keeping a healthy international equity position. these act as a nice offset towards otherwise a slightly
riskier exposure and the fact that truthfully we're also overweight exquity and underweigh income. one of the most attractive opportun to do that is the idea of playing defense within your large cap portfolio. very quickly, i know a lot of our viewers, income and equity markets look to utilities which have been beaten down perhaps anticipa higher rates. would you look there and see value there at all? >> see, that's an interesting dichotomy that is happening today. basically, the things that typicall could categorized as high income or high growth those are the overpriced areas and the safety area of quality defensive equity things that i call dividend growth or equity income those are the areas that are more attractive. it's not a situation whe to chase either the highest growth or dividend. you want to go for the things that are the most stable within the large cap space.
that's not true across the board. >> point well taken. jason pride, great to see you again. coming up they made their fortunes in china. why does someone wealthy want to leave that here's what to watch next week. it the end of the quarter and monthly, belie it or not. a read on manufacturing and since the markets are closed on friday for independence day, the labor departmt will release the june employment report on thursday morning. another rea on the jobs market will come with a report on private payrolls as well.
and that's what to watch ne week. > some of the biggest consumer companies i the world are getting hit by a double whammy. a sluggish economy and a changing consumer. and today, executives from some of the very companies were in new york telling investors what they plan on doing about that. sarah eisen has more from the consumer goods summit in new york. whe it comes to the basics food household products consumers are holding back. and for the giant companies behind those brands growth is hard to come by. from coca-cola to campbell soup to nestle profits are not coming from sales growth. >> i do see a lot of opportunity anyhow. so we have been growing the prices every year. >> reporte ecoc problems including sw downs in emerging markets like china and brazil and sluggish growth in the u.s.
and europe and japan is changing consumer taste. >> there's natural or gluten-fre new concepts coming unp and we have to connect with that. it's too soon to tell whether consumers are responding to ingredie changes by the companies but until economic growth comes back in force, especial in emerging markets, the companies are struggling. for "nightly busine" i'm sarah eisen. >> by the way, safety regulators are investigating complaints about ford's f-150 pickup trucks. they are the top selling pickups in the country right now. as many as 250,000 pickups could be impacted and they are looking into reports that the power brake assist can fail making it hard to stop in some of those vehicles. > finally tonight, even as the chinese government introduces new economi reforms, many of china's wealthy are leaving that
country in droves and they are doing it in an unusual and controve way. >> reporte china is seen as a land of opportunity, now home to 3 million millionair 2014 survey found that two of three polled are looking to emigrate. julie is joining the wealthy people l china. she made her fortune manufactur clothes. >> transla a lot of young people don't like this type of work anymore so i want to look for new business opportunities. >> reporte she's moving to america becau there, she says she feels free. >> can i take a look around? >> yeah sure. of course. >> immigration agents like anna young, help affluent chinese qualify for the u.s.' visa program, a scheme where foreigne invest at least $500,000 into an american project in exchange for a green card. young said the average wealth of her clients is about $1 million
in assets. >> why would they want to leave? >> pollution. and i think their main concern of them when they get rich, they thinking of better education for their kids and better lifestyle, i should say. hi. >> reporte we caught up with ge after she moved to new york. she invested $500,000 into a gold mine in idaho for her green card. sh hoping to start a business in the u.s. >> transla in the u.s. everythi is reasonable. chinese might not be used to that. i like a place with rules. for rich people in china, governme policies affect how you establi your business. success is not about how hardworkg you are but whether the country supports your industry. the chinese governme is hoping to appeal to people like ge, promising to clean up the environment and squash corruption as more of its citizens demand a modern and healthier society. but so far, the china dream